Aging, Children and Youth, Legislative & Military Affairs- House

Sing over it today representative fielding's witness was not able to be with us so we're putting that on our agenda for Wednesday so the on the bill we have today is house bill thirteen ninety one representative wing you're recognized. And representive wing if you would first tell us about the amendment and then we'll go to the body of the bill thank you madam chair with your permission I'd like to bring up a couple of folks as well they can introduce themselves up I can start going over the amendments as well if you'd like that it's actually a three part amendment we've added a couple of co sponsors we've also amended just the title to give us that wonderful acronym of safer Arkansas safeguarding against financial exploitation of retirees and then the last part gives us some flexibility that will be able to go through a little bit more so as we present the bill with regards to financial reporting. Okay. Sure cells. Good afternoon I'm Shannon Holly on with the attorney general's office. If we can get you to put your might just a little closer to you. Yes is that helpful okay that's better okay good I'm Shannon Holly on with the AG's office. Laurie tridens president CEO of the Arkansas bankers association. And I think we're still in the amendment portion the I would appreciate a good vote on the amendments please all right we have a motor did you have a motion motion to accept the amendment all in favor say aye. Opposed say no the amendment is adopted and now we're ready to hear the body of the bill thank you very much thank you Committee I'm just very briefly as people over fifty years old control over seventy percent of the nation's wealth fraudsters are using new tactics to take advantage of the retiring baby boomers and the growing number of older Americans COVID nineteen has seen an escalation in these types of crimes isolation equals more access to the scammers and loneliness prequels more willingness to engage with the scammers according to the consumer financial protection bureau more than thirty seven billion dollars is lost each year as a result of financial exploitation of seniors and what this bill attempts to do is to give us a better and mechanism to address this both through financial institutions with reporting and also allowing our attorney general's office to engage in the process sooner what is happened in the past is many of our seniors have gotten involved in these and have. Gotten to the point where so much money has been given away before the process has been able to be stopped that their entire life savings has been depleted and what we have we have found out as we research this bill is that many people along the way knew something suspicious was happening but were not able or did not know how to raise their hand and say we've got a problem. And when you've got a group of seniors that did everything right their whole life financially they say they lived beneath there we when there means they save for the rainy day and they say so that in their last years they could do the things they wanted to do when they want to do them. And then in the last moments they fell for a scam they fell for a trick. And it's double down because what happens is sometimes these people are so embarrassed by what has happened they don't want to report it they still want to believe that it's true and it's not and as we said thirty seven billion dollars goes away from people who did all the right things for the first eighty percent of their life. I'd like to share with you just briefly with your permission madam chair. a very short letter that I received just yesterday says thank you for your work on a bill that is desperately needed for over a year now my mother in law has been harassed and called day by scammers we believe or overseas she is the stuff scammers dreams are made up she is widowed lonely chatty friendly and extremely gullible entrusting she is convinced the callers are from publishers clearing house and that she is one of seven hundred fifty thousand dollar prize no amount of begging and pleading with her has lessened her confidence in these ruthless evil scammers to use all kinds of tactics to gain her trust and her money recently we had to beg her to stop payment on a twenty five hundred dollar check she had sent as a holding check for the processing of her big prize. We Dodge the bullet on that one but just this week and we became aware that she was buying five hundred dollar gift cards at Walgreens the scammers have manipulated her to go the cash route to avoid detection by the banks who we have asked to flag her account for suspicious activity. Now all they have to do is read the numbers on the back of the card and just like that they have stolen five hundred dollars this is a gut wrenching exhausting cycle that has left us with little if any support we feel completely hopeless and at a loss for what to do to fix this horrible situation I'm so grateful that help could be on the right or her eyes and with this bill. The update just this morning this person emailed me back in that twenty five hundred dollar check that they thought they had stopped was not stopped it was cashed and at least five of those five hundred dollar gift cards have also been sent away this is not uncommon. And this is actually kind of small for some of the things that we hear about. I became aware of this when someone very close to me was a victim of this she was my Sunday school teacher when I was nine years old and she knew how to run the Sunday school class of nine year old boys and girls because she lived her life in a very a methodical way and and knew what was right what was wrong but in the waning years of her life she fell victim to a scam. It wasn't just four thousand dollars it was hundreds of thousands of dollars and we did everything we could to stop it. But she was convinced that she had won the lottery this happens quite a bit and so I would like to turn just a little moment of time over to the attorney general's office and then also to the Arkansas bankers associates. Thank you representative wing thank you members for allowing me to be here to talk to you today. We are we're honored to participate in a general religion has made as senior issues a real initiative of her office and so we're proud and in our public protection department to participated in this and it's so important to help hard working our Kansans keep their money right where it belongs right here in Arkansas and in Arkansas financial institutions. And consumer education is important that's the key to what we're doing here but some legislative changes are needed so that we can take this to the next level and hopefully makes and improvements faster. I don't explain to you briefly how this bill works so of course you may know that employees of banks and other financial institutions are mandated reporters so they call it all protective services any time there's a suspicion of financial fraud and elder abuse or neglect reports banks aren't in a position to make calls about a person's health or dementia or any sort of impairment that the person may be experiencing. An APS is only statutorily mandated to act in it in the instance that the the victim is impaired or endangered and that definition of impairment in the custody the adult custody maltreatment act is very narrow. With this bill a large number of financial as crimes or financial exploitation cases or incidents are going unnoticed they're being reported by financial institutions by security advisers by investment brokers there they're going to APS that APS has to screen them out pursuant to the statute so these are the cases that we're looking to capture so that we can act quickly to try to regain some of that money. This bill mandates that APS for DHS share the information with the AG's office within forty eight hours every seat at that report and it also there's that exception for weekends and holidays just to allow them a little bit more time and of course you know forty eight hours from the receipt of the report and is mistrusting can tell you thank tellers know their customers there's no one that knows our customers better I think than a hairstylist and bank teller. And they know the names of their grand children they know where they eat out they know their habits and they know their financial situation. So when in our cans and has a discussion with that bank teller about pre paying for taxes on lottery winnings thank teller scan and a what's up in the bank tellers not gonna by the lies that the victim has been instructed to tell that bank teller this bill allows the bank teller to call the manager and to say Hey something's wrong we need to delay this disbursements and miss Smith doesn't need this money right now can we check into this it It allows that and it allows the bank to notify the AG's office or other appropriate law enforcement agencies so that we can try to get involved as well and catch other scammers because I promise you there not just came in one person if the scammer is damning a victim in Northwest Arkansas there's probably ten and then and if we can just have a little bit and that will help. Investment advisors and as broker dealers already have the ability to hold that money report and hold and so this is not really a new concept that we're introducing it's just that we didn't add it to the financial institutions and when it was first presented in Arkansas. And I just want to briefly tell you as a success story one of representative wings constituents saw that works at a bank so our press conference when representative wing in Senator Dismang all the bill and she was so excited she knew what to do so she called. And this got got lost on the way to the bank and its not her real name of course and she called the bank for directions and she didn't exactly know how to make it there but finally when she made it there the bankers have their I was questioning her whether she was okay and she asked to cash out a CD that she wanted to do some home improvement projects and this method is in her early eighties so it was an odd request she took the cashier's check that she had from the CD and then later that day she asked to open a new account. And then from that new account she asked that another cashier's check be made to a gentleman in a northern state so she gave an address that she was going to send over ten thousand dollars see. And the cashier's check was deposited and then it cleared. Well the bank in Arkansas was devastated they thought they hadn't caught it they had been able to fix it but we were able to work with local law enforcement here in law enforcement in the other city as well as the secret service to obtain that money back so ms Smith got her money back and she and through some efforts of consumer that consumer education she now knows that she was being scams and with part of a very common and fortunately lottery as lottery scam. So unfortunately is representative wings that this story is not uncommon it happens frequently and I've got so many cases right now with the AG's office that my facts are getting mixed up on which cases which and this is something we can fix I believe that we have the power and through at least cutting down a little bit and easily and really work on it and as some other states have done to curb it completely and I pulled R. twenty twenty consumer complaint numbers before I left today. We had six complaint last year after favorite grand child scheme within involved dollar amount at over thirty five thousand dollars. We had thirty complaints characterized as imposter scams with the dollar amount of over eighty six thousand dollars. Twenty four complaints as lottery scams and the number is staggering two point three million dollars lost just last year in twenty four complaints you know there's more. Eight complaints for romance scams totalling fifty two thousand and then fifty one complaints for tech support involving two hundred and eight thousand dollars. And then the FTC the Federal Trade Commission they reported over twenty eight hundred consumer complaints just from Arkansas last year. Reporting over thirteen million dollars in fraud losses. The clearly we need to improve and we're we're in the top fifteen states with the amount of act consumer losses in related to lottery scams so that that should be a focus and I'm so pleased to have this wonderful group that representative when put together to be able to present this bill to this body thank you. Thank you I I really really appreciate representative when bringing us bringing this to as an allowance allowing us to participate on this task force I thank you to have adequately covered everything about the bill and I know that you all have had a long day so I'll be very brief in the fact that this bill action and mentioned allows banks and other financial institutions to hold disposition transactions prior that this also adds the fact that if you meet the definition of elderly adults that is also allowed prior to this if you did not show that the customer did not show a cognitive impairment the bank was not allowed to deny them access to their money so with this it gives us a little bit of extra time to work with law enforcement or to contact somebody that's on somebody else's name on the account or or another third party and try to get this stopped before it happens as we sing here hundreds of thousands of dollars with just one one customer and and this is just another tool in our toolbox that will allow us to help stop this fraud so we are very thankful and very excited about this bill. And we have some questions for you representative bearing. Thank you madam chairman and I guess this questions for the tourney generals over here it is kind of hard to see with the plexiglass but special interest of this being at my age but so I held a series seven and series sixty three brokerage license at one point and we had the the requirement to know your customer so does my understanding we don't we don't have anything like that on the banking industry side is that correct. There are no your customer regulations that's true but they without this law banks don't have the ability to stop a suspicious transaction if the adult appears to be cognitive okay follow up yes. So in smaller banks rural banks like in my district I agree with you that is very easy to know your customer as being a bank teller because some of our tellers for twenty years and a cedar customers every week but in the end like Pulaski County are you going to the bank Z. KT and they don't know you from Adam and they don't develop that relationship so what what made or they're measures in place in the banking industry to be able to ferret out the the issues with the a suspicious activity. There are many many federal and state regulations I said but about know your customer as well as the bank secrecy act and and other things that speak to that a lot of it is if they come in and it's a romance scam or something like that I mean I think that's where a lot of this is aimed at or the particular scams and and banks are very good about educating their tellers and their managers about what to be on the look out for so with that it met one of those criteria they're going to take a second look at it their automated systems on the back and I also do some flagging but this is this is really what helps get to the heart of the scams. Representative McKenzie. Mistrial in more time. Thank you sorry about that I'm I really like this a lot just have a question not be as questions. When someone gets flagged and it's actually legitimate but they're in the flag process how hard is it for them to get out of that we all know what it's like when our credit card shut this down for perceived fraud so what's the process to legitimize it and walk away and make sure everyone's good and go on with your you know whatever proceeding they wanna do that transaction actually was legitimate. Thank you why would say from the banking standpoint if they were quickly able to ascertain that everything was okay then they at at any point they could just released that whole now if it's being turned over to law enforcement at that point it would be it would be in that process and they would take over from there. So it is involved in our process where we've got an investigation going and we're looking at potentially going to court to extend the disbursement or to the extent the delay on the disbursement during that investigation process wanted that provisions is that we can determine the AG's office can determine that it's a legitimate transaction and just as saying that we can release that and then obviously during the court process the judge would that that we've made that at a quick hearing so it shouldn't take long. For it to be determined and I would say it would be rare that we get to that point I think most of the time it would be from the bank's doing it or if the. Not at it is game transaction follow up yes. Thank you yes I'm I'm wondering about sometimes you know when we've got grand kids are you know a family relative that maybe is taking advantage of Graham also to speak in those I think would be the more difficult to distinguish whether or not it's fraudulent or not so I guess that that do you see many of those and you for see that being a bit of an issue. Under the deceptive trade practices act which is what this is geared for it's mainly the scams that we're talking about that are targeting the and the seniors and the elderly. If it's a caregiver or someone that's a family member generally those are gonna fall under the jurisdiction of adult protective services and likely because that being the members on the account or is exporting them as a care giver if we could I mean it's certainly if that if that person who is exploiting the senior is a care giver or has a business or is you know running money through some sort of scam or deceptive trade that could be a case but that's really not what we're referencing here. Representative cloud. Thank you madam chair thank you for bringing this bill forward just give me some clarification please like Page seven line to the financial services provider may also refuse or delay the execution of a financial transaction except or so my question is is how long can that consumers assets be frozen. Before a determination is made is that where the forty eight hours comes in. The forty eight hours comes in with respect to reporting from adult protective services and to the AG's office to make that determination. And I'm reading the page that you reference just one second I'm sorry I just couldn't find a place where those assets could be frozen for ex number of days or. The way that it's written now it is open ended just to allow time for that the investigation to occur it's hard to determine when you're working with other states and in certain instances federal agencies that are working with task force overseas it's hard to ascertain how long that's going to take and so right now there's it is open ended. Not I would just add to that is not the goal of the bank to hold your money so they will be doing everything they can to work with law enforcement and and making a review in doing what needs to be done to get that customers money open and ready to go. Follow up please yes that I understand that and and appreciate that but it kind of makes me a little nervous that somebody cannot have access to their funds. For an open ended period of time. So I'd have a real question about that thank you. I think that maybe it. Matt this might help that this is specific to the this transaction so it doesn't mean that all of your assets are going to be are going to be frozen this transaction is going to be delayed if that's helpful. And I just add that everybody in the process of this transaction is hopeful that everything is legitimate and wants to get it cleared as soon as possible that's that's in the interest of everybody in this whole sequence is that this transaction take place it was it wants to be found that it's legitimate as soon as possible and move forward a south. Seeing no additional questions what is the will of the well sorry would you like to close for your L.. Yes I I think what we we've gone through a couple of of interesting concepts here and I just wanted to with regards to representative to concede but add pointed out that you know about fifty percent of the scams are from people that we don't know you know from somewhere out of the country or something like that but about fifty percent or the care giver and so this bill kind of addresses both of those with with APS through the reporting mechanism and then also with a financial institutions as well then that's a that's a staggering statistic I think fifty percent are actually coming from close to home and so that that's one thing that that was a good point to bring out We've had a great amount of input I filed this bill as a shell bill a long time ago to try to bring like minded people two to read have recognized that this is indeed a problem and the attorney general's office the bankers association or obviously you're here at the table but we had a quite a few people at the big table for many many weeks as we went through what are the best practices we pulled from other legislation from other other states that and pull their best practices and adapted it here for Arkansas we also had the support I mean the the the Arkansas credit union association has had input on this bill in fact of one of the that amendment was that was in part for their desires to give some flexibility to them we have law enforcement including the FBI securities offices but had input on this and a lot of individual bankers as I got into this personally I saw how how much they were concerned about this because they knew what was happening and they couldn't do anything about it. And it was sad to see that that's what was going on so that so those are those are the concerns that we had what this bill does is allows the right people to do the necessary things to protect these seniors financial assets with that I'm close for the bill. What are the wishes of the committee I have a motion do pass we have several motions do pass from recognize the one from that representative very. As amended as do pass as amended correct yes all right all in favor say aye. Opposed say no. And the bill passes thank you thank you very much madam chair thank you Committee. Committee that is the on the bill we have for today we do have several for Wednesday. Unless more bills are filed Wednesday may be our final day this kind of hold off on that for sure and and see that you'll be hearing from us but we'll be hearing several bills on Wednesday thank you for the good work sorry for the late hour.